Look for major changes from Bush, next Congress

Health care costs near top, with tax and torts following

JOYCE M. ROSENBERG, Associated Press

Published 5:30 am, Friday, November 5, 2004

NEW YORK - President Bush's re-election and the Republican Party's larger membership in the next Congress have made small-business advocacy groups optimistic about some of the issues on their national agendas.

The National Federation of Independent Business welcomed Bush's re-election in a statement this week, and Dan Danner, the group's senior vice president for public policy, said in an interview, "We believe very strongly that this president — probably more than any other in my recollection — has gone out of his way to be a supporter of small business."

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Health care plans

With health care costs a major concern for business owners, the election has raised hopes that
national association
health plans will become a reality in the second Bush term. Under association health plans, small businesses can buy into group health insurance plans anywhere in the country, giving them greater leeway in shopping for a cheaper plan.

Although Bush endorsed the concept in this year's State of the Union address, a bill to create national association health plans stalled in the Senate after winning approval in the House. Now, with the Republicans winning four new seats in the Senate, giving them a margin of 55-44 over the Democrats, with one independent, "we may see some more movement" on the plans, said Erin Fuller, executive director of the Washington-based National Association of Women Business Owners, which supports creation of the plans.

Association health plans are supported by the National Federation of Independent Business, which is also based in Washington. Danner predicted health care will be part of an aggressive Bush small-business agenda during the president's second term.

Small business groups also expect to see more tax cut legislation during Bush's second term.

Permanent tax changes

At the very least, the groups expect that tax cuts passed during the last four years and that are scheduled to expire between now and 2010 will be made permanent, including the expanded $100,000 deduction for small-business equipment purchases.

"Some plan should be on the agenda pretty early on to address that," McCracken said.

McCracken's group is also looking for the administration and Congress to correct one of the inequities of the Internal Revenue code that allows employees of large companies to pay for their health insurance premiums on a pretax basis, saving them money, but that doesn't accord small business owners the same treatment.

Fuller said her association's members would also be looking for more favorable treatment of business expense deductions, such as those for meals and entertainment.

Currently, businesses can deduct only 50 percent of what they spend on meals and entertainment, while business gifts deductions are limited to $25 per recipient per year, an amount that has been left unchanged for decades despite the impact of inflation.

The business advocates also expect tort reform, which would limit businesses' liability in lawsuits, to be a priority in the second Bush term and the next session of Congress.

Legal issues

A bill that would put limits on class-action lawsuits was another casualty of congressional deadlock this year, and Danner said the changes in the makeup of the Senate might help move that legislation along next time around. The legislation would move some class-action lawsuits to federal courts from state courts, making it harder for plaintiffs lawyers to shop around for states that historically have supported large damage awards.

There are also hopes that another bill, which would limit compensation in asbestos damage awards, would also be more successful in the next Congress. And Danner expected medical malpractice to be on the Bush agenda.

Business groups have backed tort reform legislation because of the ongoing increase in damage awards, and in lawyers' fees, as businesses defend themselves. And health insurers say that rising medical malpractice claims are a huge factor in soaring insurance premiums that businesses are forced to pay.